cookie

This site uses cookies to provide you with a great user experience. By visiting monetamarkets.com, you accept our cookie policy.

Allow all
Pro Trader Demo Account Contact Us
Sign up
icon-english English
icon-english English
Sign up Demo Account

What is the MACD indicator?

December 21, 2022 |
　　　

What is the MACD indicator?

The Moving Average Convergence Divergence (MACD) is a momentum indicator that shows the relationship between two moving averages of a security’s price. It is commonly used to identify trend changes and to confirm trends, as well as to signal the strength of a trend. The MACD is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA.

How is it used by traders?

Traders often use the MACD to identify potential buying and selling opportunities. For example, when the MACD is above zero, it may indicate that the security is in an uptrend, while a MACD below zero may suggest that it is in a downtrend. Additionally, traders can watch for a crossover of the MACD and its signal line, which is a 9-period EMA of the MACD. A bullish crossover, where the MACD line crosses above the signal line, may indicate that it is a good time to buy, while a bearish crossover, where the MACD line crosses below the signal line, may suggest that it is a good time to sell.

How can I add MACD to a chart in MT4 or MT5?

To add the MACD to a chart in MetaTrader 4 (MT4) or MetaTrader 5 (MT5), follow these steps:

  1. Open the chart for the currency pair, stock, or other instrument that you want to analyze.
  2. Click on the ”Insert” menu at the top of the chart and select ”Indicators” from the drop-down list.
  3. In the ”Indicators” window, scroll down until you find the ”Moving Average Convergence Divergence” and then double-click on it to add it to the chart.
  4. The MACD will appear on the chart as a separate window below the main price chart.
  5. You can customize the appearance of the MACD by right-clicking on it and selecting ”Properties” from the context menu. This will open the ”Moving Average Convergence Divergence” properties window, where you can change the color, line style, and other settings for the indicator.
  6. Once you have customized the MACD to your liking, click ”OK” to apply the changes and close the properties window. The updated MACD will be displayed on the chart.

Moving Average Convergence/Divergence - MT4 chart picture
open chat
close chat